The major types of international business
A. Trade Commodity trade Service trade
B. Investment Foreign direct investment Portfolio investment
Commodity trade:
Franchising can be regarded as a special form of licensing. Under franchising, a firm, called the franchisee, is allowed to operate in the name of another, called the franchiser who provides the former with trademarks, brand names, logos, and operating techniques for royalty. In comparison with the relation between the licenser and the licensee, the franchiser has more control over and provides more support for the franchisee.
Besides, they can benefit from location advantages of foreign operation without any obligation in ownership or management. The use of licensing is particularly encouraged by high customs duty and non-tariff barriers on the part of the host country. However it is not advisable to use licensing agreement in countries with weak intellectual property protection since the licensor may have difficulty in enforcing licensing agreement.